The European Central Bank (ECB) has outlined three models for putting central bank money onchain as tokenization changes the infrastructure used to settle financial transactions. ECB Executive Board member Isabel Schnabel presented the models at the Bank of England’s Future of Money conference in London on October 1, 2026.
The approaches would either tokenize central bank reserves directly, connect existing real-time gross settlement infrastructure to distributed ledger technology (DLT) platforms, or use a private intermediary to issue tokens backed by central bank reserves. The ECB said central bank money could retain its role as the anchor of the monetary system while operating alongside tokenized deposits, stablecoins and other digital assets.
ECB Sets Out Three Onchain Settlement Models
The first model would have the central bank issue reserves directly on a programmable platform, making the reserves natively tokenized. The second would retain the existing real-time gross settlement system and connect it to a programmable DLT platform through an interoperability layer, with reserves remaining non-tokenized. The third would allow a private intermediary to tokenize reserves held at the central bank and issue settlement tokens fully backed by those reserves. Those tokens would remain private claims rather than direct claims on the central bank.
The ECB’s presentation links the models to potential benefits of tokenization, including programmability and atomicity. Programmability allows settlement to depend on rules that execute automatically, while atomicity allows different legs of a transaction to settle together or not at all.
The central bank has already moved toward this infrastructure through Pontes. The Eurosystem launched Pontes on September 21, offering a dual settlement model through TARGET2 or DLT and providing tokenized central bank money for DLT-based transactions. The system connects market DLT networks used for tokenized securities, deposits and stablecoins with Eurosystem infrastructure. The launch followed the Eurosystem’s plan to settle tokenized assets using central bank money, with Pontes providing the cash leg for wholesale transactions involving tokenized assets.
Investor Takeaway
The ECB outlined three ways to bring central bank money into tokenized markets, ranging from direct tokenization of reserves to intermediary-backed settlement tokens.
Pontes And Appia Expand The ECB’s Onchain Work
Pontes will also introduce planned enhancements including 24/7 availability and decentralized programmability. The ECB presentation said the project combines a bridge solution with a Eurosystem-operated DLT platform, moving beyond simply connecting existing payment infrastructure to blockchain-based networks.
The framework builds on Schnabel’s earlier argument that central banks should move their money onchain. In that August speech, she argued that central banks could use DLT and smart contracts to modernize monetary policy implementation, collateral management and liquidity provision.
The ECB is also using Appia to examine the longer-term architecture for a tokenized European financial ecosystem. The project is exploring a single unified ledger, interconnected networks and multiple shared ledgers that could host central bank money alongside securities, deposits and stablecoins. The work comes as European institutions develop other forms of digital money. The ECB recently opened applications for merchants to participate in a 12-month digital euro pilot expected to begin in the second half of 2027.
Market infrastructure providers are also testing systems that could support tokenized settlement. Clearstream has been testing Pontes for connectivity, operational readiness and delivery-versus-payment settlement ahead of its launch. The ECB’s three-model framework adds a broader question to those efforts, focusing on how central bank reserves could operate within an increasingly tokenized financial system.
Investor Takeaway
Pontes and Appia form the ECB’s broader effort to integrate central bank money with DLT-based financial infrastructure and develop a tokenized European financial ecosystem.